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Homes Sales Up in October, Prices Continue to Rise
|Though some economists believed higher home prices would hinder home sales throughout the second half of the year, record low mortgage rates have likely prompted many prospective buyers to carry on with plans to make the investment. A new report from the National Association of Realtors shows the number of existing homes sold in October were up, while home prices continue to trend upward with the improving economy.
Monday, November 26th, 2012
Though some economists believed higher home prices would hinder home sales throughout the second half of the year, record low mortgage rates have likely prompted many prospective buyers to carry on with plans to make the investment. A new report from the National Association of Realtors shows the number of existing homes sold in October were up, while home prices continue to trend upward with the improving economy.
According to data from NAR, total existing sales were up 2.1 percent when compared to the previous month, as the seasonally adjusted annual rate moved to 4.79 million from 4.69 million. October's sales were also 10.9 percent greater than they were in October last year, when 4.32 million units were sold.
The superstorm on the East Coast in the final days of October had a negative influence on applications, however, the chief economist of NAR, Lawrence Yun, noted that sales weren't likely affected as harshly because many transactions had already been completed by the month's end. He went on to say NAR expects home sales in the Northeast to potentially take a hit in the coming months, as the region will need time to recover after the storm.
Existing home sales were affected slightly, however, they only slipped 1.7 percent to a pace of 580,000 in October. Sales were still 13.7 percent greater than the same month a year ago. The median price was also up 4.6 percent, reaching $232,600. Sales increased in the South, jumped 11 percent higher than October 2011, and increased 2.1 percent from the previous month. In states such as Florida, the local economy continues to post substantial improvements, as unemployment has been on the decline and many more residents return to work.
High affordability also contributed to a lower inventory of homes, however, the absence of delinquent properties helped boost home prices. The national median existing-home price when including all types of properties was $178,600 in October, up 11.1 percent from the median price in October 2011. Rising home prices benefit sellers, by allowing them to list their home's competitively and buyers make the investment when the market is thriving.
Data from NAR shows delinquent properties accounted for around a quarter of all transactions, matching that from the previous month. This is also down 4 percent when compared to what they accounted for this time last year.
Increased sales have pushed the total housing inventory down in October, as it fell 1.4 percent from September levels, when the sales pace was 5.6 months. This also marks the lowest number of homes listed for sale since February 2006.
Those considering homeownership may benefit from beginning their home search soon, as affordability may disappear with rising mortgage rates. Enlisting the help of a local real estate agent can simplify the homebuying process, and provide a more professional transaction.
"Even with rising home prices, we'll continue to see favorable housing affordability conditions over the coming year, but they won't last forever," said Gary Thomas, president of NAR. "Inflationary pressures are expected to build during the next two years. As a result, mortgage interest rates will also rise with inflation. Buyers who are currently held back by tight mortgage credit standards should work to improve their credit scores so they'll be able to qualify for a mortgage while conditions are still favorable."
National real estate trends have a major impact on the real estate market on a daily basis. Keeping up-to-date on the latest news and notes posted by GL Homes can make sure those looking for South Florida homes know exactly how the current market will affect them.